Poll Budget: boon or bane for Bharat?

Why don’t the needs of the rural economy garner attention in every budget of every government?

The message is clear. You can’t ignore this segment. If you dare to, it will be perilous. If proof is required, bypoll results in Rajasthan offer them in plenty. Perhaps this truth has hit the NDA government hard as it enters the last leg of its term before facing the people in the 2019 general elections.

The word ‘rural’ has become the fulcrum around which the final full-fledged budget of the NDA-government is structured. Observers and analysts are quick to dub it as an election budget. The glass is half-empty or half-full as one sees it. And, it depends on which side of the political divide you are on. One can endlessly debate the budget.

This rural focus — nay, pinch hitting as in a T20 game — by successive governments in their final lap gives ammunition for wider interpretation. Is it an admission of failure to focus properly in the first instance? Or, is it an articulation of genuine course-correction? Whatever be the reason, it raises serious questions on the way governments prioritise issues impacting the economic status of a vast part of the population.

Occasional focus

Thankfully, elections happen every five years in India. But for that, the word rural, it appears, would have remained in the realm of a distant memory in the minds of political masters. If ‘rural economy’ is the core for India, why is it that the legitimate concerns of the rural population are sought to be addressed only in the eleventh hour (at almost the end of their terms) by governments?

Gas links, support price for farm products, electricity connections, toilet facilities and health cover are arguably the minimum that the underprivileged lot, who form the bulk of the rural society in India, rightfully deserve but are denied.

In a country like India, State-driven institutional support mechanisms for the masses — be it for education or healthcare — are conspicuous by absence. At best, it is minimal, and support comes largely from members of the extended family.

Given this, it is incorrect to indulge in comparisons with developed economies on the subsidy issue. The latest Budget has rightly focussed on these issues. The intentions are welcome.

The timing of its announcement — ahead of general elections — however, is a sad commentary on the governing class. Everybody understands that Bharat (rural economy) is the core of India. But why is Bharat invoked only when the nation is about to go for the elections? Is Bharat a handy seasonal tool used only for poll times? Will the focus on Bharat see delivery in time or remain a part of the Budget papers? Election 2019 will give a decisive verdict.

The contrast in the India-Bharat divide is sharp. You have, on the one hand, the extravagant style of recalcitrant businessmen such as Vijay Mallya and the like whose shenanigans have triggered a massive overhaul of the corporate and banking rules. On the other, you also the see rural poor demanding the conductor of a bus to issue a three-rupee ticket quickly as he has to get down at the next stop! The funny part is that Bharat never supplies any wishlist to anybody. It patiently chugs on.

And, it silently acts during the polls. It is the non-Bharat component of India that talks a lot, lobbies hard and makes heavy demands of rulers. In the din, the silence of the Bharat is left largely unnoticed. But then, Bharat has the power to change the electoral fate of parties.

Perception management

In an inter-connected world, perception management has become the primary avocation of the ruling class. Views of rating agencies, global institutions and the international investing community merit for more serious attention than the cries and murmurs at the ground level.

Not surprisingly, the opposing views of rightists and ‘tie-wallahs’ have found expression disproportionately in the media — be it on the decision to levy long-term capital gains tax or on the move towards taxation of the digital economy by proposing to expand the scope of nexus-based business presence rules by introducing the concept of ‘significant economic presence’.

It doesn’t matter that the Budget has a host of announcements that are friendly to businesses — such as tax exemption for property transfers to a fully-owned Indian holding company from subsidiaries and vice versa and import duty rationalisation for Make In India initiatives.

The problem for the Indian economy at the moment is a combination of excess capacity and inadequate demand. “Investment will come if there is growth,” said R. Dinesh, MD, TVS Logistics, matter-of-factly. And, the onus lies on the government to revive demand. Rural India will have to necessarily form the core component of this revival exercise. How to put more money into the pockets of rural Indians? That task is better addressed by the government. That could be achieved only if India could care to foster at least an adequately nourished population in Bharat.

This cannot just be a poll-eve pledge. It has to be a permanent commitment. Policies and actions will necessarily have to be oriented towards satiating at least the bare minimum requirement of this vital cog in the economy wheel. Read against this, the ‘populist’ tag attached to the Budget is politically correct but largely uncharitable to Bharat. Subsidies to the poor and underprivileged must be viewed in the overall context of invigorating Bharat and bridging the chasm in the Indian economy.

If these are ‘no-no’ for developing a prudent economy, how could incentives and concessions to industry be right? The twin balance sheet problem (ie, the stress in balance sheet of the lender and borrower) facing the industry gives a clue about the misplaced trust that has indirectly hurt public depositors. India needs a robust Bharat to shine permanently. And, that calls for a 24X7 Bharat service. Sadly, this is looked upon as a late service call to retain power.

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